WPP’s earnings slip, but CEO says it has not yet seen a change in client spending

WPP’s latest results missed analyst expectations, highlighting the growing uncertainty clouding the advertising industry. With potential trade tariffs looming and client spending under pressure, even the biggest players are being forced to navigate a tough, unpredictable market.WPP saw its like-for-like revenue less pass-through costs fall 2.7% to £2.48 billion (approximately $3.3 billion) for the first quarter of 2025, a steeper decline than the 2.5% dip analysts had forecast. Overall group revenue declined 5% year-on-year.Acknowledging the risk: Chief Executive Mark Read addressed the tariff situation directly, saying that while WPP itself isn’t directly impacted, the levies “will impact a number of our clients as well as the broader economy.” He emphasized that, as of the Q1 update, WPP had “not seen any significant change in client spending” specifically linked to the tariffs.Holding the line: Despite the Q1 performance and looming economic questions, WPP reiterated its full-year guidance, projecting like-for-like revenue less pass-through costs to land somewhere between flat and a 2% decline compared to 2024. Read noted this forecast already “reflected a challenging environment,” suggesting the company had anticipated headwinds, though perhaps not the specific nature of the tariff debate.Regional pressures mount: The overall decline masked significant regional variations. The UK market proved weakest, with a 5.5% like-for-like drop attributed to tough year-ago comparisons and pressure on project spending in automotive and healthcare. North America, WPP’s largest market, was nearly flat with a 0.1% decline, while China continued to struggle, falling a further 17.4%.Specific divisions feel the pinch: WPP’s public relations arm, now centered around the merged Burson entity, saw like-for-like revenue dip 6.6% in Q1, reflecting ongoing client caution with discretionary spending, particularly in Europe. The division’s total reported revenue fell sharply, though this was heavily skewed by the sale of FGS Global late last year.Strategic bets continue: Amid the market uncertainty, WPP highlighted progress on internal initiatives. Read pointed to “renewed momentum” at the recently integrated VML and Burson units, citing Q1 wins including Generali, Heineken, and Levi Strauss & Co. The company also continues its significant investment in its AI-powered platform, WPP Open, with adoption reaching 48,000 client-facing staff by March, up from 33,000 in December.Investor scrutiny persists: The Q1 results land as WPP faces broader pressures. The company, once the world’s largest ad group, now trails French rival Publicis and faces a potentially larger competitor if the Interpublic-Omnicom merger completes later this year. The advertising holding company’s share price has fallen significantly, fueling speculation about its future direction under Read and new chairman Philip Jansen.